Executive Life Insurance Company
According to Robert Sobel, First Executive was involved in 90% of Drexel s underwritings, which accounted for about $40 billion in bonds from 1982 to 1987. In 2003, Credit Lyonnais and others agreed to pay $771 million in settlements resulting from false statements to bank regulators in connection with the acquisition of junk bonds and the insurance business of the failed Executive Life Insurance Company of California. Notwithstanding that California law forbids a foreign owned insurance company from owning insurers in California, despite court records and documents, Insurance Commissioner Garamendi says he was ‘unaware’ a foreign government’s bank was buying the bonds for pennies on the dollar. .Its financial problems and subsequent insolvency in 1991 shocked its policyholders and the financial world. At the time, First Executive was the biggest insurer ever to fail, which resulted primarily from money-losing investments in junk bonds. First Executive through Fred Carr had a strong association with Mike Milken and the brokerage firm Drexel Burnham Lambert Inc, whereby at the end of 1990 the company owned high-yield debt, much of it issued through Drexel, with a carrying value of $9 billion.
Executive Life Insurance Company (ELIC) was once the largest life insurance company in California.
